Shadbolt v Hardie - [2002] WADC 159

JURISDICTION : DISTRICT COURT OF WESTERN AUSTRALIA
IN CIVIL

LOCATION: PERTH

CITATION: SHADBOLT -v- HARDIE & ORS [2002] WADC 159

CORAM: NISBET DCJ

HEARD: 17 & 18 JULY 2002

DELIVERED : 2 AUGUST 2002

FILE NO/S: CIV 847 of 2001

BETWEEN: TREVOR JAMES SHADBOLT
Plaintiffs
AND
CAROL NORMA HARDIE
First Defendant
DEAN GEORGE SCOOK
Second Defendant
CHALLISTON PTY LTD
Third Defendant

FILE NO/S :CIV 848 of 2001

BETWEEN :ALBERT LAWRENCE SHADBOLT
MARGARET EMMELINE SHADBOLT
Plaintiffs
AND
CAROL NORMA HARDIE
First Defendant
DEAN GEORGE SCOOK
Second Defendant
CHALLISTON PTY LTD
Third Defendant

FILE NO/S :CIV 849 of 2001

BETWEEN :BLYTHE SHADBOLT
Plaintiff
AND
CAROL NORMA HARDIE
First Defendant
DEAN GEORGE SCOOK
Second Defendant
CHALLISTON PTY LTD
Third Defendant

FILE NO/S :CIV 850 of 2001

BETWEEN :DAVID PATRICK SHADBOLT
ANDREA LEE SHADBOLT
Plaintiffs
AND
CAROL NORMA HARDIE
First Defendant
DEAN GEORGE SCOOK
Second Defendant
CHALLISTON PTY LTD
Third Defendant

Catchwords:

Contract - Interpretation - Ambiguity in terms - Resolution of ambiguity - Implied term - Interest - Calculation of - Supreme Court Act 1935 - Section 32 - "Interest upon interest"

Legislation:

Supreme Court Act 1935 as amended

Result:

Judgment for plaintiffs in each action with interest

Representation:

CIV 847 of 2001

Counsel:

Plaintiffs:     Mr G A Rabe
First Defendant             :     Mr H R Robinson
Second Defendant         :     Mr H R Robinson
Third Defendant           :     Mr H R Robinson

Solicitors:

Plaintiffs:     Stables Scott
First Defendant             :     Haydn Robinson
Second Defendant         :     Haydn Robinson
Third Defendant           :     Haydn Robinson

CIV 848 of 2001

Counsel:

Plaintiffs:     Mr G A Rabe
First Defendant             :     Mr H R Robinson
Second Defendant         :     Mr H R Robinson
Third Defendant           :     Mr H R Robinson

Solicitors:

Plaintiffs:     Stables Scott
First Defendant             :     Haydn Robinson
Second Defendant         :     Haydn Robinson
Third Defendant           :     Haydn Robinson

CIV 849 of 2001

Counsel:

Plaintiff:     Mr G A Rabe
First Defendant             :     Mr H R Robinson
Second Defendant         :     Mr H R Robinson
Third Defendant           :     Mr H R Robinson

Solicitors:

Plaintiff:     Stables Scott
First Defendant             :     Haydn Robinson
Second Defendant         :     Haydn Robinson
Third Defendant           :     Haydn Robinson

CIV 850 of 2001

Counsel:

Plaintiffs:     Mr G A Rabe
First Defendant             :     Mr H R Robinson
Second Defendant         :     Mr H R Robinson
Third Defendant           :     Mr H R Robinson

Solicitors:

Plaintiffs:     Stables Scott
First Defendant             :     Haydn Robinson
Second Defendant         :     Haydn Robinson
Third Defendant           :     Haydn Robinson

Case(s) referred to in judgment(s):

Australian Broadcasting Commission v Australasian Performing Rights Association Ltd (1973) 129 CLR 99
Codelfa Constructions Pty Ltd v State Rail Authority of New South Wales (1982) 149 CLR 337
Ruby v Marsh (1975) 132 CLR 642
Schenker & Co (Aust.) Pty Ltd v Maplas Equipment & Services Pty Ltd & Anor [1990] VR 838
Treloar v Ivory & Anor (1991) 4 WAR 318

Case(s) also cited:

Anaconda Nickel Ltd v Tarmoola Australia Pty Ltd (2000) 22 WAR 101
Banque Brussels Lambert SA v Australian National Industries Ltd [1989] 21 NSWLR 502
BP…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

Continue reading Shadbolt v Hardie

Details

AGLC: Shadbolt v Hardie [2002] WADC 159
Case: [2002] WADC 159
Decision Date: 2 AUGUST 2002

CaseChat Overview and Summary

The matter of Shadbolt v Hardie came before the Supreme Court of Western Australia where the plaintiffs sought an award of interest in accordance with section 32 of the Supreme Court Act 1935. The plaintiffs argued that they were entitled to interest on the unpaid amounts of interest due from the defendants. The defendants contested the plaintiffs' entitlement to such interest, arguing that it would contravene the prohibition on "interest upon interest" contained in section 32(2)(a) of the Supreme Court Act 1935. The court was required to determine whether the award of interest in these proceedings would violate the legislative prohibition on compounding interest and whether the unpaid interest constituted a debt upon which interest was payable as of right.

The court held that the prohibition on "interest upon interest" in section 32(2)(a) was a limitation on the court's discretion to award pre-judgment interest. The court's power to award interest was discretionary and could not be exercised in a way that resulted in compounding. The court reasoned that the unpaid interest was not a debt upon which interest was payable as of right but rather a sum for which interest could only be awarded at the court's discretion. The court applied the statutory formula for calculating interest and concluded that the plaintiffs were entitled to interest on the unpaid interest amounts. The court calculated the interest amounts to be awarded in each case and provided the specific calculations for each judgment.

In conclusion, the court determined that the plaintiffs were entitled to interest on the unpaid interest amounts as per section 32 of the Supreme Court Act 1935, without contravening the prohibition on "interest upon interest." The court ordered that interest be included in the judgments for the plaintiffs. The final orders of the court were that the plaintiffs were to receive interest on the unpaid interest amounts as calculated, with the specific amounts for each case as follows: $34,152.65 for the first action, $44,438.65 for the second action, $9,144.63 for the third action, and $22,070.20 for the fourth action, each inclusive of the calculated interest.

Orders

Orders of the court

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Background

Background to the litigation

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Evidence

Evidence Before The Court

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Decision

Reasons for decision

Since s 32 of the Supreme Court Act 1935 was amended by Act No 47 of 1982 (s 3) proclaimed to come into effect on or about 20 June 1983 it has (relevantly) read as follows:"32.Court may order pre-judgment interest (1)In any proceedings for the recovery of any money (including any debt or damages or the value of any goods), the Court may order that there shall be included, in the sum for which judgment is given, interest at such rate as it thinks fit on the whole or any part of the money for the whole or any part of the period between the date when the cause of action arose and the date when the judgment takes effect.(2)This section does not — (a)authorise the giving of interest upon interest;(aa)…(b)apply in relation to any debt upon which interest is payable as of right whether by virtue of any agreement or otherwise;…" In their prayers for relief in these proceedings the plaintiffs sought "… Interest thereon from 22 June 2001 to the date of judgment at such rate as this Honourable Court deems just pursuant to s 32 of the Supreme Court Act." Two questions arise viz:1.The judgments in these actions being for interest only, the capital sums having been repaid, whether an award of interest under this head of claim would offend against s 32(2)(a); and2.whether the interest is in fact a debt upon which interest is payable as of right by reason of the agreements. In my opinion the answers to these questions may be briefly stated. In s 32(2)(a) in my opinion the legislature is speaking of the court's award of interest. It is a fetter upon the court's undoubted discretion to award pre‑judgment interest. As to the discretionary nature of the award see Treloar v Ivory & Anor (1991) 4 WAR 318 at 322 where Ipp J said:"It seems to me that the object of s 32 of the Supreme Court Act, has always been to empower the court in its discretion to award pre‑judgment interest on whatever sum of money was ordered to be paid by the judgment debtor. There seems to be no reason to limit the court's power in this regard." His Honour was not of course considering the effect of s 32(2)(a) in that case but it seems to me to be relatively clear that what the legislature has provided is that the court in the exercise of its discretion may only make an award of interest which has no element of compounding in it. So, for example, the court could not award interest at the rate of 6 per cent per annum with annual rests. As to the second question, the answer is that the debt is the unpaid interest and upon those sums in each case interest is not payable as of right but only in the discretion of the court. Bearing in mind what Barwick CJ said at 652 – 653 in Ruby v Marsh (1975) 132 CLR 642 that:"The purpose of giving courts the power to award interest damages is to my mind twofold, and neither aspect of the purpose should be lost sight of. In the first place, the successful plaintiff, who by the verdict has been turned into an investor by the award of a capital sum, and whose claim in the writ has been justified to the extent of the verdict entered, ought in justice to be placed in the position in which he would have been had the amount of the verdict been paid to him at the date of the commencement of action. In the second place, the power to award interest on the verdict from the date of the writ is to provide a discouragement to defendants … from delaying settlement of the claim or an early conclusion of proceedings so as to have over a longer period of time the profitable use of the money which ultimately the defendant agrees or is called upon by judgment to pay.",it seems to me that the plaintiffs are entitled to interest pursuant to the provisions of s 32 upon the unpaid amounts of interest which should have been paid by the defendants and the calculations are as follows:847/2001: $32,006.57 x 6 per cent p.a. from 21 June 2001 until judgment (408 days) = 5.26 per day x 408 days = $2,146.08, hence the judgment will be in the sum of $34,152.65 inclusive of interest.848/2001: $41,643.85 x 6 per cent p.a. from 21 June 2001 until judgment = $6.85 per day x 408 days = $2,794.80, and judgment will be for $44,438.65 inclusive of interest.849/2001: $8,569.35 x 6 per cent p.a. from 21 June 2001 until judgment = $1.41 per day for 408 days = $575.28, and judgment will be for $9,144.63 inclusive of interest.850/2001: $20,683.00 x 6 per cent p.a. from 21 June 2001 until judgment = $3.40 per day for 408 days = $1,387.20, and judgment will be for $22,070.20 inclusive of interest.

Ratio Decidendi

Legal Principle Established

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